First time dividend investing to get ‘free’ rent
Geographic Arbitrage plays a part in my plan for how I hope to get ‘free’ rent and this plan is by no means a foolproof or perfect plan but instead these are just my baby steps to trying out investing.
The only reason I am sharing this with you is in case you are also taking your first baby steps into figuring out your life no matter what came before. I hope to inspire you to be less scared about financial terms and to understand that if you maye $5 on your $50 investment then that means you just made a 10% gain. It’s a free sandwich (that you make yourself) or a free Starbucks coffee. But free involves risk, too. Let’s dive in below:
Without beating around the bush, I bought 239 shares of a stock called AGNC. My average purchase price is around $12.50 to $13.50 and these shares each pay $1.44 per year in dividends. 239 x $1.44 = I will earn a total of about $344 per year in dividend payments from my combined AGNC shares. I say combined because I am currently trading on two apps. More on that below.
It took me about 7 months to purchase these AGNC shares. I am still quite new to buying stocks and trusting my few pennies to the stock market. I still feel nervous. But this seems like a good time to share this experience with you. Maybe you, too feel nervous but would like to make a start. And maybe sharing my journey will help you begin your own. In case you don’t read all of the below: Start with $25 and just test it out. Don’t throw more than you can afford at this experiment. But also: Don’t be too intimidated to begin. Let’t take our future back into our hands. I am writing to fellow women and men in their 40s who are very willing to try and redefine themselves and to change their futures. You who just want to learn a little by watching someone else risk their money instead of yours.
I would love for you to comment, but please IGNORE anyone in comments making financial promises. Likely that’s spam.
$344 is not a lot of money in America. But $344 is one month’s rent in a modest but clean and safe apartment in Thailand. Electricity and water bill included. It may not be an ‘instagrammable’ apartment but a place to rest our tired bones, we aren’t going to get younger, in case you needed a reminder. Thailand is where I could afford to pay rent off my dividend earnings. For me this makes sense as it is a place where I want to go one way or another, irrespective of my fledgling stock market dabbling. But It gives me a lot of pleasure to know that in theory my first month’s rent in Thailand will be ‘free’.
Of course rent may be similarly affordable in a number of other developing countries, too. Thailand is just an example. It just happens to be that I love Thai culture, food and the language sounds beautiful, too. Thailand is a place where I have run away to on a number of occasions when life in the UK or USA got too tough and I needed a break before resuming.
ALERT: Nothing is really free, there is real risk in trusting a shaky financial market with money that is VERY hard to earn. Goodness knows if this is really a sound financial step or if it’s lacking contextual foresight but it is what I did. Use it as inspiration but NOT financial advice.)
AGNC is a type of REIT, they deal in real estate financing. Please look them up in more detail. And you can choose any other dividend stock. It’s just that this one had an annual yield of 9% when I bought in. And with a recession looming and interest rates having gone up the share price has dropped. That’s good and bad. Bad because it indicates risk. More risk. Remember: I really am NOT a financial advisor, I am sharing my own financial experiment and hopefully it’s happy ending outcome.
Which trading app should you use if you are new? ANY. I can give you my referral link, and I will get a small financial incentive and YOU will also get a small sign up bonus if you use my referral. But it ultimately doesn’t matter which one you use. They all have small differences in UX (that stands for user experience) and you really need to try several to see which one works best for your needs.
You can use any trading app, there are some that allow you do buy partial shares as well as whole ones (these are called Fractional Shares, but with AGNC you can buy whole ones as they are currently — at time of writing — trading for under $12 each. There are a range of terms that you will need to google and understand.
I have been drip feeding money (that I can’t afford to lose) into the trading app of my choice (I don’t think it makes a substantial difference which one you prefer. I use Webull AND Robinhood and each have aspects that I prefer over the other.).
I don’t feel great about having this much money tied up in an app. I don’t know what happens if markets crash, will these apps survive? Nobody ever addresses this. So I recommend that while you don’t want to lose ANY money, still consider carefully how much money you could survive losing if something like 2008 or past depression area stock market crashes took place.
What I don’t like with Webull: I can’t instantly use money that I transfer into the app. I need to wait for the money to be cleared (or pre-cleared) and that can be a day or several.
What I really like about Webull: I like their user interface and at first glance I personally find it more trust inducing than Robinhood. (Both have a huge user base. And Youtube financial influencers trust Robinhood with tens of thousands to hundreds of thousands in their investments. So don’t let my personal impressions and preferences tint your own too much.)
What I really like about Robinhood: Instant investing is easy. I can initiate a money transfer and can immediately (in seconds) buy shares or Crypto.
What I don’t like about Robinhood: I prefer the stock graphs and timeline viewing experience on Webull.
I use Robinhood when I want to catch a dip in the share price and can’t wait several days like I would have to Webull.
I don’t like leaving my money sitting in waiting on either app. I prefer to transfer it in and buy my shares or crypto immediately.
I started with Webull and accidentally bought in at the height of the stock market and crypto market hype. This means on Webull I am somewhat stuck with shares and crypto at a high average buy price. A way to improve my investment would be to lower my average by buying more shares and crypto while it is low.
Well.. This is where it all starts to feel like gambling and I am not sure about this.
So this is where (maybe this is a bad idea) buy 3/4 of my shares and crypto with Robin Hood and only 1/4 with Webull; incrementally lowering my average but simultaneously building my Robinhood portfolio.
Why am I doing this?
I want to be in a position to be able to cash out a portion of my investment at short notice when / if I need the money. And I don’t want to cash out while in major loss, as I am on Webull. (NOT Webull’s fault but entirely my own.) So I kind of have 2 different strategies. One is with a more longterm view, and probably smaller gains: On Webull. And the other where I bought in at a much more advantageous price on Robinhood.
I don’t have enough money to call ANY of this real investing. But if I walk away having made even just a 2% gain over leaving the money sitting in a bank then maybe it is worth it? My actual target gain is 10% and given how little money I have in the market my take home profits may not really be worth all the risk I am taking.
I wonder if the money may have been better spent on investing in my health and career than in trying to join the race out of a type financial FOMO.
What should you do? What would I do if I got to consider starting investing again. Well, if the market was as low as it is now, then I would sign up for a trading app again. I would AUTOMATE my investment in 2–3 stocks and in 1–2 crypto currencies and drip feed a few dollar, pound or Euro per month into the app for auto investment. I realise now that buying a bulk at once is not necessarily the best strategy, ESPECIALLY when the market is at record heights.
We know that we are running close to a time of peak oil, we know that countries are changing their attitudes to immigration and sharing of resources. We can see that when we pay a little (little) attention to what is taking place in the world. I can’t imagine that when the market is at peak height that this can last. It’s NOT a good idea to buy into the stock or crypto market when the prices are at an all time height. By all means spend a little to get a foot in the door. But don’t let financial trends FOMO lead you.
Look at Dividends. To make anything noteworthy in terms of an annual dividend yield you will need to entrust about $2000+ into this dividend stock or choice of stocks. There IS risk. These are unusual times, but we could probably say this about many times. Another advantage about spreading your investment across multiple trading platforms (and if it is accessible to you also in different currencies) is that should one go out of business for whatever wild global reason: then you will still have the other(s).
I am too green behind the ears to have a deeper understanding of how safe my money is in these apps and which may be government insured and protected. I don’t know. I followed the flock of Youtube and Instagram influencers who woke me up to thinking about my finances. And the result could be positive but it could also mean that I will lose my money.
We can’t all be Warren Buffet.
But I want to test this out and for the remainder of 2022 I plan to put 10–35% of my monthly earnings into stocks and crypto. The percentage of my income will change depending on how well each month goes. I am a freelancer and my income fluctuates. In better months I will dedicate more of my money.
I will focus on Crypto, Dividend stocks and American Airlines because I have a soft spot of them and believe in them. In my first year of experimenting with trading I bought Apple, Google, Tesla and Amazon. But I sold what I could at a (small) profit and am stuck with some while the prices have fallen. I am trying to not sell anything at a loss. If it’s down, even by 50–60% I have to hold. Even if it is scary.
Now I think you should consider your financial health and if you can make a start investing. Try it with $25/£25/€25 just dabble. But set a limit. Don’t get carried away. Robinhood makes it too easy to overcommit your financial investment. The instant nature of the app can be a slippery slope for your finances. Be disciplined.
Webull: minimum spend on fractional share is $5
Robinhood: allows $1 fractional share purchases
Look up placing limit orders (you set the price you are willing to pay for a share, this prevents you overspending.)
